ADT 2014 Annual Report Download - page 99

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FORM 10-K
Judicial Circuit, Palm Beach County, Florida. On July 14, 2014, the parties agreed to stay that action pending
resolution of motions to dismiss that are expected to be filed in the securities actions described above. The Court
approved the stay on July 23, 2014. A fifth derivative action asserting similar claims was filed in the Delaware
Court of Chancery on August 1, 2014. Defendants have moved to dismiss that action, which is entitled Ryan v.
Gursahaney, C.A. No. 9992-VCP.
In March 2014, we also received a demand from a shareholder to initiate litigation against our officers and
directors in connection with our stock repurchase program in 2012 and 2013 and the buyback of stock from
Corvex in November 2013. Our Board of Directors investigated the matters with the assistance of an outside law
firm and, on July 18, 2014, decided to reject the demand. In September 2014, we received a demand from
another shareholder to initiate litigation with regard to the same matters raised in the March 2014 demand. On
September 19, 2014, our Board of Directors decided to reject the demand.
See Note 7 to the Consolidated and Combined Financial Statements for a description of income tax matters.
In addition, we are subject to various claims and lawsuits in the ordinary course of our business, including
from time to time contractual disputes, employment matters, product and general liability claims, claims that we
have infringed the intellectual property rights of others, claims related to alleged security system failures and
consumer and employment class actions. We have recorded accruals for losses that we believe are probable to
occur and are reasonably estimable. See Note 7 to the Consolidated and Combined Financial Statements for
further information. While the ultimate outcome of these matters cannot be predicted with certainty, we believe
that the resolution of any such proceedings will not have a material adverse effect on our financial condition,
results of operations or cash flows.
Item 4. Mine Safety Disclosures.
Not Applicable.
33